Every few months, SEBI issues another order against an unregistered “investment advisor” who collected crores in fees from retail investors and delivered nothing but losses. The investors in those cases weren’t naive; they just didn’t know the right questions to ask before signing up.

Here’s the uncomfortable truth: SEBI registration is a compliance floor, not a quality ceiling. It tells you the advisor has passed the minimum requirements. It does not tell you whether their process is rigorous, their fees are transparent, or their advice is actually built around your goals rather than their incentives.

If you’re a senior professional a CXO, doctor, NRI, or founder evaluating a SEBI-registered investment advisor for the first time, these five questions will do more to protect you than any amount of Googling. More importantly, this article tells you what a good answer looks like and what should make you walk out

Question 1: Are You SEBI Registered, and Can I Verify It Right Now?

The answer should take less than 30 seconds. Every registered investment advisor in India has a SEBI Registration Number, and you can verify it instantly on the SEBI website under the “Intermediaries/Market Infrastructure Institutions” section. If an advisor hesitates, redirects the conversation, or says “I’ll send it to you later” that is your answer.

Two follow-up details matter here. First, ask whether they are registered as an Individual RIA or a Corporate RIA. Corporate RIAs operate under a structured team with defined processes and compliance oversight. Second, ask whether the person you’re meeting with is themselves SEBI-registered or if only the firm holds the registration. Under SEBI’s Investment Advisers Regulations 2013, the individual giving advice must also be appropriately certified.

What a red flag looks like: Any advisor who cannot share their SEBI registration number immediately, or who describes themselves as a “wealth consultant,” “financial coach,” or “portfolio strategist” without referencing SEBI registration, is almost certainly operating outside the regulatory framework.

Question 2 — How Do You Charge, and Are You Truly Fee-Only?

This is where most investors stop asking too early. They hear “fee-only” and move on. But the structure of that fee determines whether the advisor’s interests are aligned with yours or with a product provider’s.

Under SEBI’s current regulations, a registered investment advisor can charge in one of two ways: a fixed fee capped at ₹1.25 lakh per annum per client, or a percentage of Assets Under Advice (AUA) capped at 2.5% per annum per client. SEBI does not permit the same advisor to use both models for the same client.

What matters more than the number is the conflict check. A genuinely fee-only advisor earns nothing from the products they recommend no trailing commissions, no distributor kickbacks, no referral fees from AMCs or insurance companies. Under SEBI rules, advisory and distribution activities must be strictly separated. Ask directly: “Does your firm or any related entity earn a commission or distributor income on products you recommend to me?”

Question 3 — Walk Me Through Your Financial Planning Process

A serious advisor can describe their process in 5 minutes. If the answer is vague or immediately jumps to “we’ll analyse the market,” move on. A structured SEBI-compliant advisory process has specific stages and produces specific documents and you should know what to expect before you sign anything.

The onboarding process should include KYC, a thorough financial data collection (income, expenses, existing investments, liabilities, insurance, EPF, ESOPs if applicable), and formal risk profiling. After analysis, a well-run practice produces three key documents:

Client Risk Profile (CRP): A formal document defining your risk tolerance level, not a verbal summary. This is the foundation on which everything else is built on.

Investment Policy Statement (IPS): This is the most important document most investors have never heard of. It defines your asset allocation, target return, investment horizon, rebalancing triggers, and liquidity requirements in writing. If an advisor doesn’t produce an IPS, your engagement has no formal guardrails.

Investment Advisory Agreement: A signed contract specifying services covered, fee structure, duration, and the grievance redressal mechanism. Under SEBI regulations, this is mandatory before any advice is given or any fee is charged.

What a red flag looks like: An advisor who skips risk profiling, or who provides recommendations before producing any formal documentation, is not running a compliant process. Also, watch for advisors who produce a “model portfolio” on the first call without collecting any data about your actual financial situation.

Question 4 — Where Does My Money Actually Go, and Who Controls It?

This is a point of genuine confusion for first-time advisory clients. The short answer: a SEBI-registered investment advisor does not hold your money at any point. Your capital stays entirely in your own accounts.

For mutual funds, investments are executed through direct plans, typically via platforms like MFU (Mutual Fund Utilities) or directly on AMC portals. For stocks and ETFs, execution happens through your existing demat and trading account. The advisor provides recommendations; you authorise each transaction. Your bank account, demat account, and investment accounts remain in your name, with your access and control.

This structure is both a safety feature and a transparency mechanism. Ask specifically: “Do you have any Power of Attorney or standing authorisation over my accounts?” A fee-only SEBI RIA should have no POA and no discretionary control. If an advisor asks for a POA as part of onboarding, that is a serious compliance red flag.

Also, ask about the review cycle. A well-run practice typically conducts formal portfolio reviews quarterly or semi-annually, with rebalancing triggered either by a calendar schedule or by a significant deviation from the target allocation defined in your IPS.

Question 5 — How Will You Measure My Success?

Most advisors talk about beating the Nifty 50. That is the wrong benchmark for most investors, and a good advisor knows it.

A SEBI-registered financial advisor operating on goal-based principles measures success against your plan, not against an index. If your goal is ₹2.5 crore in 14 years for your child’s overseas education, the meaningful metric is: are you on track to reach ₹2.5 crore? A year in which your portfolio returned 8% while Nifty returned 10% could still be a successful year if you’re ahead of your goal trajectory because you may have had a lower-risk allocation appropriate to your situation.

Ask the advisor to show you a sample progress report. It should include portfolio value, current asset allocation vs target allocation, progress toward each defined goal, and any recommended changes. If the only performance metric they show you is annualised return vs benchmark, the advisory is structured around market performance rather than your life outcomes.

Conclusion

SEBI registration is necessary but not sufficient. The five questions above are a filter not just for compliance, but for process quality, alignment, and transparency. A good advisor answers all five comfortably, clearly, and with documentation to back it up.

If you’re a professional with ₹25 lakh or more to invest, the real question isn’t “should I hire a SEBI-registered advisor?” It’s “how do I find one whose process is rigorous enough to handle the actual complexity of my financial life?” That’s a different, harder question and it’s worth spending time on before you sign any agreement.

At Moneyvesta Stock Management Advisory, we follow a SEBI-compliant, process-driven approach designed to help investors build disciplined, long-term wealth with complete transparency.